Emirate's gains in transparency ranking led by new regulations in market

The real estate markets of Dubai and Abu Dhabi have been recognised as the top global improvers in 2022, according to JLL’s latest Global Real Estate Transparency Index (GRETI).

Dubai also entered the ‘Transparent’ tier for the first time underlining its position as the most transparent property market in the Middle East and North Africa region.

The emirate gained three ranks in the index to 31st position globally and is the only property market in Mena to feature in the ‘Transparent’ tier.

Dubai’s gains in the transparency ranking are led by new regulations around market lending practices, beneficial ownership tracking and sustainability reporting as well as enhanced digital services and data provision such as service charge management, automated valuations, and transactions databases through the Dubai REST platform. The gain in ranking also builds on the new initiatives announced by the Dubai Government with private companies such as transaction-based sales indices and a building wellbeing certification.

Sultan Butti bin Mejren, Director General of Dubai Land Department, said: “With the global recovery of the economy, we recognised the need to focus on improving market transparency to make better decisions that will support both developers and investors alike. Today, investors from around the world are increasingly looking at Dubai’s real estate to invest, and we, at Dubai Land Department, are committed to enhancing transparency within the sector.”

Bin Mejren added: “The government’s ongoing efforts that are driving digital services and data provisions, new regulations and sustainability reporting have helped advance Dubai’s ranking in this year’s Global Real Estate Transparency Index, which is an important guide used for cross-border investment and corporate occupiers to inform their decision making.”

Abu Dhabi, which ranked 45th globally, gained one rank and maintained its position in the 'Semi-Transparent' tier. The improvements reflect the expansion of digital services through the Dari platform including sales and lease management and development and transaction databases. The Department of Municipalities and Transport (DMT) also published its first code of ethics covering real estate professions, and the property market has benefitted from increased data provision by private providers in new sectors, the report states.

Thierry Delvaux, Chief Executive Officer at JLL, Middle East, Africa and Turkey said: “Faster progress and greater global alignment across industry initiatives and standards are needed to meet growing pressure from companies, consumers, investors and the public for higher levels of transparency. This year, Dubai and Abu Dhabi have been recognized as top global improvers, benefitting from a concerted government focus on improving market transparency.”

Saudi Arabia maintained its position in the top 50 of the global rankings, reinforcing its position at a regional level. The kingdom scored particularly well in the category of Listed Vehicles’ Corporate Governance transparency. This is due to a combination of the solid REIT regulatory framework in place (introduced in 2016) and its listed vehicles having good-quality financial accounts, data disclosure and corporate governance practices.

KSA also scored well on its Investment Performance transparency – for the listed market, it has the Tadawul Real Estate Development Index and several of its REITs are constituents in the FTSE EPRA NAREIT Global REITs Index.

According to the report, a common aspect of the changes taking place across global real estate markets is the need for greater harmonisation and alignment in sustainability initiatives, regulatory environments, technologies, and data frameworks.

Many companies are focusing on the Environment, Social and Governance aspects of their business, and more regulations and metrics to enhance and provide guidelines for these goals across the sector are likely.

Further, privacy risks and need for more clear and rigorous regulations around data management and security are rising as the amount of data being collected by companies and governments on their buildings, employees and communities increases rapidly.